Lerch v. Life Insurance Co. of North America

United States District Court, W.D. Wisconsin

May 3, 2019

JOLEEN M. LERCH, Plaintiff,v.LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant.

OPINION AND ORDER

STEPHEN L. CROCKER MAGISTRATE JUDGE

On July
27, 2018, plaintiff Joleen Lerch filed a lawsuit in this
court under § 502(a)(1)(B) of the Employee Retirement
Income Security Act of 1974 (ERISA), seeking review of
defendant Life Insurance Company of North America's
(“LINA's”) denial of her claim for long-term
disability insurance benefits under an employee welfare
benefit plan. Before the court is Lerch's motion to
exclude the plan's Appointment of Claim Fiduciary (ACF)
form and Group Disability Insurance Certificate (bates
stamped LINA 001906-001934) from the administrative record.
Dkt. 11. For the reasons explained below, I am denying the
motion.

BACKGROUND

LINA
issued a policy of long-term disability insurance to Wausau
Coated Products, Inc. in March 2015, for the purpose of
insuring benefits under an ERISA-governed employee welfare
benefit plan. The parties agree that Wausau is the plan
sponsor and plan administrator and that LINA is the claim
fiduciary responsible for the payment of benefits under the
plan. See dkt. 12-3 at 1 and 24. According to the
allegations in the complaint, Lerch became ill in March 2015
and applied for long-term disability benefits. LINA approved
the application and awarded Lerch long-term disability
benefits for approximately two years. However, on June 17,
2017, LINA denied Lerch's claim on the alleged ground
that she was no longer disabled under the “any
occupation” standard of disability. After
unsuccessfully appealing the decision administratively, Lerch
filed a lawsuit in this court on July 27, 2018.

On
August 2, 2018, only a few days after filing suit,
Lerch's counsel sent LINA's counsel a letter
requesting Lerch's “entire file” related to
the denial of her claim, including all “plan
documents.” LINA responded to the request but failed to
produce a copy of the ACF form and insurance certificate.
After litigation commenced, I entered a preliminary pretrial
conference order in which I set January 11, 2019 as the
deadline for LINA to produce a copy of the administrative
record to be reviewed by the court. Dkt. 10. LINA met the
deadline and included the ACF form and insurance certificate
as part of the official administrative record.

ANALYSIS

Lerch
contends that the administrative record was closed as of the
date she filed her lawsuit (July 27, 2018) and opposes the
“late” inclusion of the ACF and certificate in
the administrative record. She bases her argument solely on
Feggins v. Reliance Standard Life Ins. Co., No.
11-CV-073-WMC, 2012 WL 12996107, at *1 (W.D. Wis. Jan. 19,
2012), in which Judge Conley held that this court's
review of an ERISA denial is limited to the administrative
record that was before the insurance company when it made its
decision. See also Militello v. Cent. States, Se. &
Sw. Areas Pension Fund, 360 F.3d 681, 686
(7th Cir. 2004) (“The deferential nature of
the arbitrary and capricious standard of review means that
the court may ‘consider only the evidence that was
before the administrator when it made its
decision.'”). Applying this standard, Judge Conley
refused to consider evidence that Feggins was awarded Social
Security Disability Insurance (SSDI) benefits because the
SSDI award was not issued until seven months after
Reliance Standard made its final decision with respect to
Feggins's application for disability benefits under the
policy. Feggins, 2012 WL 12996107, at *2.

As LINA
points out, Feggins does not apply because it
involved documents that did not exist at the time that the
claims administrator (Reliance Standard) made its benefits
decision, which rendered the documents irrelevant to the
court's review of the denial of Feggins's claim. In
this case, the ACF and insurance certificate are plan
documents that existed at the time LINA made its decision
with respect to Lerch's claim. See Raybourne v.Cigna
Life Ins. Co. of N.Y., 576 F.3d 444, 448-49
(7th Cir. 2009) (ACF is plan document); Ruiz
v. Cont'l Cas. Co., 400 F.3d 986, 991
(7th Cir. 2005) (insurance certificate is plan
document). Therefore, Feggins is not instructive and does not
require the exclusion of the ACF or insurance certificate
from the administrative record in this case.

More to
the point is whether the ACF and insurance certificate can or
should be excluded from the administrative record because
LINA had some duty to produce them when Lerch asked for the
plan documents at the start of her lawsuit. As LINA points
out, Lerch failed to develop any meaningful argument on this
issue in her motion, nor did she cite any authority requiring
a claim fiduciary to produce all relevant plan documents
after the commencement of litigation but prior to the
deadline for producing the administrative record for the
claim. In fact, the Court of Appeals for the Seventh Circuit
has held that the plan administrator (here, Wausau), and not
the claims administrator (LINA), is proper party to sue for
failure to provide plan documents, Hightshue v. AIG Life
Ins. Co., 135 F.3d 1144, 1149 (7th Cir. 1998)
(summary plan description), and has “rejected the
contention that other parties, including claims
administrators, can be held liable for the failure to supply
participants with the plan documents they seek, ”
Mondry v. Am. Family Mut. Ins. Co., 557 F.3d 781,
794 (7th Cir. 2009). See also 29 U.S.C.
§ 1024 (setting forth duties of claim
administrator to furnish plan information to plan
participants).

In its
response brief, LINA points out that 29 C.F.R. §
2560.503-1(j) requires a claim fiduciary to provide a
claimant with “all documents, records, and other
information relevant to the claimant's claim for
benefits” upon request. However, LINA contends that
administrative plan documents are not “relevant”
to a claim for benefits. Specifically, the regulation defines
the term “relevant” as any document, record or
other information that:

(i) Was relied upon in making the benefit determination;

(ii) Was submitted, considered, or generated in the course of
making the benefit determination, without regard to whether
such document, record, or other information was relied upon
in making the benefit determination;

(iii) Demonstrates compliance with the administrative
processes and safeguards required pursuant to paragraph
(b)(5) of this section in making the benefit determination;
or

(iv) In the case of a group health plan or a plan providing
disability benefits, constitutes a statement of policy or
guidance with respect to the plan concerning the denied
treatment option or benefit for the claimant's diagnosis,
without regard to whether such advice ...

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